Representatives from companies discuss on the sideline of a forum about co-branded cards in Việt Nam. -- Photo Courtesy of Visa Vietnam

HCM CITY – The global trend of utilising co-branded credit cards is opening doors for Vietnamese businesses to enter the global market, meeting the rising expectations of consumers, experts said.

According to Investopedia.com, a co-branded credit card is a card offered by a retailer or another business in collaboration with a credit card issuer or network.

These cards typically display the logos of both the credit card company and the retailer, providing benefits such as merchandise discounts, points, or rewards when used at the sponsoring merchant, but they can also be used at any location where cards from that network are accepted.

Co-branded cards function like standard credit cards and can be used for purchases wherever cards from networks like Mastercard, Visa, American Express, or Discover are accepted.

The development of co-branded credit cards has been significant worldwide.

A report by Javelin Strategy & Research highlights that co-branded credit cards, a key sector of the US consumer credit market, are poised for further expansion.

These cards are not only popular but crucial, attracting consumers looking to enhance their connections with partner merchants.

Analysis shows that within the portfolios of 12 major issuers, co-brands comprise a substantial 62 per cent of consumer credit card products, appealing to a broad audience and driving consumer engagement with reward programmes, the website said.

In the Asia Pacific region, co-branded cards contribute significantly to consumer credit card volume.

The Loyalty Report by Bonds in partnership with Visa reveals that two out of five members strongly agree that loyalty programmes and associated co-branded credit cards seamlessly work together, creating enhanced customer experiences and fostering strong brand loyalty.

Việt Nam is emerging as a promising market, with the volume of co-branded card users rising.

Furthermore, a report from McKinsey forecasts that by 2035, many Vietnamese citizens will join the global middle class, with rising disposable incomes driving increased consumption and presenting substantial opportunities for brands in the rapidly growing Vietnamese market.

The co-branded card brings many benefits to customers thanks to promotion programmes. -- Photo Courtesy of Visa Vietnam

Numerous companies in Việt Nam have embraced the trend and partnered with card issuers to introduce co-branded cards.

For example, Shopee, VPBank, and Visa collaborated to launch their first co-branded credit card in Việt Nam in 2020, resulting in a transformative online shopping experience for millions of Shopee users.

"Over the past four years, our partnership has profoundly transformed the online shopping experience for millions of Shopee users via our co-branded card. This collaboration has exceeded expectations by delivering exclusive benefits and unparalleled convenience that deeply resonate with our customers,” said Trần Tuấn Anh, executive director of Shopee Vietnam.

“We consistently receive positive feedback on the card’s seamless signup process, rapid processing times, and robust security features, all of which have contributed to a more streamlined and secure shopping experience, and we remain committed to providing exceptional value and innovative solutions to our customers as digital commerce continues to evolve," he said.

Dung Đặng, Visa country manager of Việt Nam and Laos, said: "In today's competitive business environment, businesses that effectively use data to add value throughout the customer journey are more likely to succeed. With the rise of hyperpersonalisation, co-branding offers great potential for targeted marketing. Consumers want personalised offerings. In co-branding, generic value propositions will be replaced by more relevant, hyperpersonalised ones. This lets brands meet customers exactly where they are.”

At its recent Co-Brand Forum in Việt Nam, Visa said that its consulting and advisory services are instrumental in boosting co-brand portfolio acquisitions through in-depth analysis of VisaNet’s transaction data and data-driven strategy.

Furthermore, Visa marketing advisory services foster the growth of co-brand programmes by implementing effective marketing strategies and delivering compelling communication that resonate with target segments and product value propositions, and leveraging its exclusive sponsorship platforms and partnerships.

Particularly for brands aiming to reach specific target audiences such as Gen Z, sports enthusiasts or SMBs, these key principles for co-brand growth remain relevant today.

Embracing emerging verticals and demographics, and understanding their needs, are essential to fuel growth in this space, it said.